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Europe's Incredible Shrinking FTTH Price Tag

Ray Le Maistre
2/16/2017
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MARSEILLE -- FTTH Conference 2017 -- The cost of passing every home in Europe with a fiber connection, and actually connecting half of those homes, is falling, according to a new study conducted on behalf of the FTTH Council Europe industry group.

Having pre-announced a few weeks ago that the cost of taking FTTH connectivity to all areas in the European Union's 28 member countries where fiber access infrastructure hasn't already been deployed would be €156 billion (US$167 billion), a presentation here updated that price tag, suggesting that the cost could really be 12% lower, at €137 billion ($145.8 billion). (See Europe's FTTH Price Tag: $167 Billion.)

These aren't two different studies, it should be noted. This is an update to the same study but with a lower total cost.

So what happened? Did Europe shrink during the past few weeks? (Please feel free to add your own Brexit jokes on the message boards…)

No, shrinkage isn't to blame -- global warming isn't that quick.

According to an official news release from FTTH Council Europe, a "12% cost reduction [from the initial figure] can be achieved by reusing existing infrastructure, more co-ordination and sharing of civil works and the re-use of in-building infrastructure."

OK, so that an interesting suggestion, and one that will surely raise eyebrows and attract interest from all parties across Europe hoping that the European Union, which has about 219 million households across its 28 members, can benefit from the best possible ultra-broadband infrastructure.

According to Raf Meersman, the CEO of fiber network planning software vendor Comsof , which conducted the cost analysis, a report that provides detail about how the costs analysis was conducted and the metrics used will be produced in the coming weeks. (Comsof, it should be noted, makes its money by selling the software tools used for this study, so this could be great marketing for the vendor if the numbers are deemed credible by the FTTH community.)

Those details will be very interesting by themselves but made much more interesting if accompanied by a country-by-country cost analysis to further stimulate debate and analysis on a more local basis. So will the report include those numbers?

Apparently not. "That information won't be included," admitted Meersman, who said that decision not to include that level of detail had been taken by the top team at the FTTH Council Europe.

So I asked the Council's Director General, Erzsebet Fitori, why such details would be kept secret because, surely, that would give the impression that there's something to hide. Fitori told me that was a historical decision and she didn't know why such information wouldn't be shared. She also tried to steer the conversation towards other studies that put the cost of taking fiber to Europe's homes at levels that are "clearly too high."

In particular, she referred to a recent study by the Boston Consulting Group on behalf of European Telecommunications Network Operators' Association (ETNO) , the industry organization for incumbent national telcos (aka the FTTH naysayers), that put the cost "to enable FTTH broadband for all European households" at €360 billion ($383 billion).

Also interesting, for sure, but what about this new report that's being promoted by the Council, the one with the much lower total cost? Fitori said she would look into the possibility of publishing the country-by-country costs that currently aren't due to be shared in the report.

Her Council colleague Ronan Kelly, the Adtran Inc. (Nasdaq: ADTN) executive who is the organization's current President, tells Light Reading he's keen to get as much information out into the public domain as possible and that the decision not to publish any information wasn't taken by the current top team. In fact, he says he's keen to sit down with organizations such as ETNO to discuss industry estimates, statistics and overviews to help bring clarity to the market.

Here's the point: The Council has commissioned a report that suggests the cost of fibering up the parts of the European Union that don't already have access to top-grade connectivity isn't as onerous as most would have thought and it's keen that the €137 billion figure gets widely publicized. But currently it doesn't plan to share key details, which appear to be too politically sensitive. Or maybe a country breakdown would attract questions about the credibility of the numbers? Or is there another reason? It's hard to say right now.

The Council should be doing everything it can to help anyone interested in funding and/or building fiber networks in Europe to do so -- as I understand it, that's its role. Withholding useful information doesn't fit with that remit.

Let's hope common sense prevails: I look forward to digesting the individual numbers for each of the 28 EU member countries in the near future.

— Ray Le Maistre, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Editor-in-Chief, Light Reading

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Ray@LR
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Ray@LR,
User Rank: Blogger
2/17/2017 | 7:18:27 AM
Re: Transparency is key
You're absolutely right.

But there's wiggle room and then there are massive discrepancies.

No good can really come from these organizations/lobby groups publishing numbers that simply suit their agendas because, quite frankly, when it comes to the crunch the numbers will be disregarded as poltically-motivated and subjective analysis. And that's a shame because there is ueful info and insight to be had from them - but they are tainted by agendas. 

An up-to-date independent analysis based on agreed criteria where no industry groups or lobbyists get to influence the numbers/outcomes etc would be of use.

Let's see if these groups can bring themselves to support such a study.
Carol Wilson
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Carol Wilson,
User Rank: Blogger
2/16/2017 | 1:15:35 PM
Transparency is key
Something like the cost of FTTH is going to vary wildly, depending on what is included and what assumptions are made. The more info that is shared the more likely the numbers can be seen as credible.
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